Tesla shares drop as third-quarter results fall short

AP, DETROIT, MICHIGAN

Thu, Nov 07, 2013 - Page 15

Shares of US electric car maker Tesla Motors tumbled nearly 12 percent in after-hours trading to US$156.41 on Tuesday after the automaker’s third-quarter results fell short of expectations.

Tesla said it sold just over 5,500 of its Model S sedans in the July-to-September period, which was a record for the automaker, but lower than some analysts had predicted. Barclays analyst Brian Johnson, for example, had expected Tesla to deliver 5,820 cars during the quarter.

In a conference call after its earnings release, chief executive Elon Musk said the company’s production has been constrained by its battery supplies, but that should ease next year thanks to a recent deal with Panasonic Corp that increases battery shipments to Tesla.

“It doesn’t make sense to amplify demand if we can’t meet that demand with production,” Musk said. “We have to figure out how to ramp up faster.”

Tesla also invested heavily in its network of US and European charging stations and in opening new stores. The company’s development costs increased as it prepares for next year’s planned launch of its Model X crossover.

Tesla lost US$38.5 million, or US$0.32 per share, in the third quarter. Its revenue jumped to US$431 million, up 6 percent from the second quarter and up from US$50.1 million in the July-September period last year.

That was far short of the US$547.5 million forecast by analysts, according to FactSet. Analysts had been expecting earnings of US$0.8 per share.

The quarter was a disappointment for Tesla’s investors, who have sent its stock up more than 400 percent this year as the company finally became profitable and the Model S became a critical success.

The US$70,000 Model S, which can go up to 300 miles on a battery charge, is Tesla’s only vehicle on the market right now.

The company said it plans to deliver 6,000 Model S sedans in the fourth quarter, for total sales of 21,500 this year. That is up from 2,650 sales last year, when the Model S went on sale.

Musk said the company remains on track to begin selling the Model S in China in the first quarter of next year.